Written Assignment Unit 4
MBA Business Administration
University of the People
BUS 5111-01 - Financial Management
Case Study
The case study is focused on determining the worth of an investment portfolio of a good friend.
Several quantitative analyses have to be done to make a final recommendation. The analysis will
include finding the current market value of each security position of the portfolio, computing the
individual yields based on current market pricing, and finally determining the weighted average
factor and weighted average yields.
All the analysis is to make a recommendation that is based on correct values. Hence, we first
need to define each item, calculate its value and understand its implication. Subsequently, we can
see the full picture and make a final recommendation.
Current Market Value
The current market value (CMV) for any financial instrument is the closest current resale value
(Kention, 2021). Investors use this to know the value of any object at the current date when
entering into a transaction. It's a concept closely related to the liquidity of an asset. If an asset has
high liquidity the owner can see the asset at a price close to the current market value.
To find CMV we need to know the current market price of the stock. The current market price of
a stock is the most recent selling price of a stock (Kention, 2021). It is one of the most trusted
indicators of that bond's current value. For a stock, CMV can be calculated by multiplying the
current market price of the stock by the total number of shares held in that particular stock
(Bragg, 2021).
Current market value = No. of shares x Current Market Price
Estimated current yield
The estimated current yield is the return on investment that an investor expects to get by
acquiring the security now and holding it for a predetermined period (Bragg, 2021). It is
dependent on the current market price of the bond. It can be calculated by dividing the annual
interest earned by the current market price of the bond (Adkins, 2019). Based on the data given
MBA Business Administration
University of the People
BUS 5111-01 - Financial Management
Case Study
The case study is focused on determining the worth of an investment portfolio of a good friend.
Several quantitative analyses have to be done to make a final recommendation. The analysis will
include finding the current market value of each security position of the portfolio, computing the
individual yields based on current market pricing, and finally determining the weighted average
factor and weighted average yields.
All the analysis is to make a recommendation that is based on correct values. Hence, we first
need to define each item, calculate its value and understand its implication. Subsequently, we can
see the full picture and make a final recommendation.
Current Market Value
The current market value (CMV) for any financial instrument is the closest current resale value
(Kention, 2021). Investors use this to know the value of any object at the current date when
entering into a transaction. It's a concept closely related to the liquidity of an asset. If an asset has
high liquidity the owner can see the asset at a price close to the current market value.
To find CMV we need to know the current market price of the stock. The current market price of
a stock is the most recent selling price of a stock (Kention, 2021). It is one of the most trusted
indicators of that bond's current value. For a stock, CMV can be calculated by multiplying the
current market price of the stock by the total number of shares held in that particular stock
(Bragg, 2021).
Current market value = No. of shares x Current Market Price
Estimated current yield
The estimated current yield is the return on investment that an investor expects to get by
acquiring the security now and holding it for a predetermined period (Bragg, 2021). It is
dependent on the current market price of the bond. It can be calculated by dividing the annual
interest earned by the current market price of the bond (Adkins, 2019). Based on the data given
